Scholastic Q1 2026: Book Fairs Grow While Education & Entertainment Lag

Scholastic Corporation, a name synonymous with school book fairs and children's literature, has released its financial results for the first quarter of its 2026 fiscal year. As a key player in children's publishing, education, and media, the company's performance provides valuable insight into trends in literacy and educational spending. Let's explore their latest 10-Q filing to understand the start of their fiscal year.

Given its reliance on the academic calendar, Scholastic's business is highly seasonal. The first quarter, spanning from June to August, is typically its weakest as schools are on summer break. This quarter followed that pattern, with the company reporting total revenue of $225.6 million, down from $237.2 million in the same period last year. This resulted in a net loss of $71.1 million, an increase from the $62.5 million loss in the prior-year quarter.

The following flow diagram visualizes how Scholastic's revenue streams are distributed across its costs and expenses for the quarter.

You may notice the "Unallocated" category in the revenue and cost breakdown. The unallocated revenue of $3.1 million primarily consists of rental income from the company's New York headquarters. The negative unallocated cost of revenue (-$1.5 million) represents a corporate-level accounting adjustment not assigned to a specific business segment.

A Mixed Performance Across Divisions

While the top-line numbers reflect a seasonal slowdown, a closer look at Scholastic's four reportable business segments reveals a varied performance with distinct bright spots and challenges.

• Children's Book Publishing and Distribution: This segment, the company's largest, includes its iconic Book Fairs, Book Clubs, and trade publishing. It was a highlight of the quarter, with revenue growing 3.8% to $109.4 million. The growth was driven by a strong performance in U.S. Book Fairs. The segment also improved its efficiency, narrowing its operating loss slightly to $35.1 million from $36.6 million last year.

• Education Solutions: Providing curriculum and literacy materials directly to schools, this segment faced significant headwinds. Revenue dropped sharply by 28% to $40.1 million from $55.7 million a year ago, widening its operating loss to $21.2 million. This decline suggests potential challenges in the institutional education market or shifts in school district spending.

• Entertainment: This division develops and licenses children's film and television content. It also saw a downturn, with revenue decreasing 18.1% to $13.6 million. Its operating loss widened significantly to $4.0 million from just $0.5 million in the prior-year quarter, indicating increased costs or lower-margin projects.

• International: Scholastic's operations outside the U.S. delivered positive results. Revenue grew 4.6% to $59.4 million. More impressively, the division cut its operating loss by nearly half, from $8.3 million last year to $4.2 million this quarter, pointing to successful cost management abroad.

The Bottom Line

Scholastic's first-quarter results show resilience in its consumer-facing and international businesses. The growth in the core Children's Book Publishing segment is an encouraging sign. However, the steep declines in both the Education Solutions and Entertainment segments weighed heavily on the overall results.

As the company's performance is intrinsically tied to the school year, the upcoming quarters will be far more critical to its annual success. Investors will be watching closely to see if the strength in book fairs and international markets can be sustained and, more importantly, whether the company can stabilize its education and entertainment divisions in a competitive landscape filled with other publishers and a wide array of digital learning tools.